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Friday, Jun 9, 2023


Forget washers and dryers. The next generation of luxury apartments is putting technology at tenants’ fingertips. West L.A.-based Public Communications Services, a company with roots in the telecommunications industry, is developing a 372-unit residential complex in Sherman Oaks to provide people who work at home with the office facilities and resources they would have in a corporate setting. The complex will include features like high-speed modems, private Internet service and fax machines, as well as word-processing support and other functions for what the developers believe is an increasing number of home workers tied to the entertainment and multimedia industries in the San Fernando Valley. These high-tech residences, popular in Europe for some time, are long overdue in the U.S. market, according to those who study work trends. “I think these guys are onto a helluva business model,” said Dr. Charles Grantham, founder and head of the Institute for the Study of Distributed Work, a research and product development laboratory for telecommuting and other workplace issues based in Walnut Creek, Calif. “These things have taken off in Europe and we’re just catching onto it.” Each apartment in the complex, dubbed The Premiere at Sherman Oaks and located on Woodman Avenue, will be wired with T1 lines (phone lines that provide access to the Internet at very high speeds) and satellite television service from DirecTV Inc. Tenants will also be able to sign on for a private Internet service that allows them to send and receive e-mail and access the Internet under a proprietary address, in much the same way that large companies maintain their own e-mail addresses. This gives tenants the prestige of a private Internet account, and is less expensive than such services as America Online. The developers say that by taking advantage of deregulation and their experience in the telecommunications industry, they can provide these services at lower cost than traditional providers could. “The whole world is deregulating,” said Paul Jennings, co-chairman and chief executive of PCS. “Apartment buildings are in a unique position because they have a high concentration of utilities. You can make that part of your competitive edge as an apartment owner.” PCS will provide a business office in the apartment complex complete with equipment such as copy and fax machines, printers, computers, as well as staff to handle office chores from collating to word processing, at a per-project cost. The complex, expected to open in July, will be laid out to give residents facilities that they would find in a traditional office environment. On the lobby level, there will be a banquet room, which can be used for parties or for large conferences, and a 15-foot by 20-foot conference room that will be surrounded by four smaller, 12-foot by 12-foot offices into which tenants can move their own equipment. “Even with telecommuting, there are junctures during the day when you need something more formal (than a home office),” said Jennings. The second floor will house a media room seating 20 to 30 people. Equipped with video playback equipment and a big-screen TV, the room is designed for those who want to make multimedia presentations. Building plans also provide the option of adding another four offices on the second floor and a second conference room on the third floor. “Depending on the demand because we’re really charting unknown territory we can expand the space,” Jennings said. Rents for studio, one- and two-bedroom apartments at The Premiere will range from $650 to $1300 per month, Jennings said. The company plans to give away free T1 access as a “move-in special” for first-year tenants. Charges for DirecTV and Internet service, which by law cannot be offered free of charge, have not yet been determined. But Jennings said that the revenues generated from these services are not intended to enhance the company’s profits. “The real value for us is tenant retention,” he said. PCS, a company that provides pay-phone and other operator-assisted calling services to institutions like prisons, entered the real estate business in 1995 following the 1994 Northridge earthquake. To build the Premiere complex, PCS bought an older complex that had been rendered uninhabitable in the earthquake for $9 million, and is pumping another $12 million into its repair. To avoid going through the process of getting new entitlements for the property and a potential conflict with local residents, PCS decided on a luxury apartment concept. Providing a full array of office support services grew from that initial idea. “Traditionally, Sherman Oaks has had an older demographic, but what we’re seeing is a much younger crowd, affluent to a large degree and related to the entertainment industry on some level,” Jennings said. “It’s our belief that, over time, with the continued shift in demographics and the increase in telecommuting and people’s overall mobility, that people will look for the additional support of a home office.” Jennings said the company drew its conclusions from a combination of census data, its own experience after renting 16 buildings it redeveloped over the past few years, and common sense. But hard data also supports his conclusions. According to the Institute for the Study of Distributed Work, about 6 percent of all U.S. workers are independently employed or telecommute. That number is expected to climb to nearly 12 percent of the national workforce by the year 2005. In Southern California, an estimated 2.39 million people work in their homes, according to the institute. Grantham believes the numbers could go even higher, because of moves afoot in Congress to establish portable pensions that will allow workers to leave companies without sacrificing their retirement benefits. In addition, health care reform efforts might, by making private insurance affordable, remove the incentive for many to stay at corporate jobs. Further, as the ranks of independent contractors swell, these workers are creating demand for more independent workers, Grantham said. He believes that as independent professionals come to need services to assist them, they build what he calls “communities of commerce” mainly by finding subcontractors through Internet searches that help their own and other businesses grow. “The statistic going around is that the number of Internet users doubles every hundred days,” Grantham said. “These people are finding each other and they are networking.” For a time in the early ’90s, the California Department of Transportation tried to establish “telework” centers similar to the planned Sherman Oaks apartments in the Antelope Valley and Riverside, in order to cut down on traffic congestion. “But Caltrans depended on people finding them and then convincing their bosses that it’s a good idea,” Grantham said. “They never did market it correctly, and it never got beyond the pilot stage.”

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